Mortgage Interest and Payments

How is Interest Calculated?

All new mortgages operate on a Daily Interest basis, whereby interest is calculated on your mortgage balance and added to your mortgage account at the end of each month. If you have a repayment mortgage, the benefit to you is that when we receive your monthly payment, we will immediately reduce the capital balance on which we calculate interest. However, any fees or other debits made to your mortgage account will immediately incur interest charges.

Reducing Your Loan Amount

Your normal monthly payment is the minimum you must pay. However, if you wish (and subject to the terms of your selected mortgage product), you may make extra payments either regularly each month or as a separate lump sum amount. The effect of paying extra depends upon whether your mortgage is arranged on an interest only or a capital repayment basis and whether interest is charged on a daily or annual basis. If you wish to make extra or lump sum payments, please contact us first, so we can explain the options available. Please remember, that depending on the terms of your selected mortgage product, your loan may carry an Early Repayment Charge. If this is the case it will clearly be stated in your mortgage offer.

Interest Rate Changes

The interest rate to be charged on completion of your loan is shown in your Mortgage Offer. Occasionally the rate shown in your completion letter may be different where a change of rate has occurred since the offer was made. We will notify you beforehand of any increase in the interest rate. Subject to your mortgage product, we may vary the rate of interest from time to time; for example, if there is a general interest rate change due to market conditions. If we change the rate we will inform you beforehand, in writing, of the new rate and monthly payments. If you are paying your mortgage by direct debit, you do not need to tell your bank that your payment is changing - we will collect the new payment amount automatically.

Mortgage Statements

Once every year we will send you a mortgage statement, which will detail:

● The payments you have made,
● The interest that has been charged and your current outstanding balance and
● Any other transactions which have taken place.

Please keep your mortgage statement(s) in a safe place. A fee is payable if you request a duplicate mortgage statement, as detailed in our Tariff of Mortgage Charges.

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